New health chief to have hands full After getting mixed results in Nebraska, familiar problems await official in Texas
AUSTIN — Four years ago, the Nebraska Department of Health and Human Services was in a state of disrepair. The child welfare division was floundering after a disastrously failed privatization experiment, Medicaid managed care was racked with delays, and officials were on the hook for tens of millions of dollars in federal fines.
Hoping to restore some semblance of order at the embattled agency, Gov. Pete Ricketts turned to a young outsider named Courtney Phillips.
The Louisiana native,
now 39, faces the same task this week as she takes the helm at the Texas Health and Human Services Commission amid great upheaval.
The agency has come under fire most recently for mishandling contract bids and allowing the state’s Medicaid managed care providers to rake in billions while denying essential services to medically fragile Texans. Former executive commissioner Charles Smith, considered a close ally of Republican Gov. Greg Abbott, retired in May, just two years into the job.
If Phillips’ record in Nebraska is any indication, it won’t be easy. While advocates and elected officials there describe her as transparent and open-minded with extensive knowledge of the health care field, they acknowledge that parts of the agency are still struggling.
“There were challenges at DHHS when she got there and, unfortunately, there will continue to be some challenges after she leaves,” said Aubrey Mancuso, executive director at Voices for Children in Nebraska, an advocacy group. She added: “It takes more than one individual.”
Two weeks before Abbott announced Phillips’ appointment in August, auditors in Nebraska unleashed a biting assessment of the agency’s child welfare efforts, estimating that 40 percent of claims between 2016 and the end of last year were paid erroneously, meaning $26 million in wasted expenses.
Auditors found that children were being moved to lower care levels but at much higher costs, that subsidy rates were at times grossly inflated, that employees were racking up tens of thousands of dollars in unnecessary travel expenses, and that a key contract had not been competitively bid.
What’s more, the federal Department of Health and Human Services found that Nebraska had failed to bring any of seven key child and family measures into adequate compliance, according to the audit. Those include categories such as “Children are, first and foremost, protected from abuse and neglect,” and “Children are safely maintained in their homes whenever possible,” and “Children have permanency and stability in their living situations.”
Child welfare accounts for about 8.5 percent of the agency’s budget in Nebraska.
“I don’t think (Phillips) created these issues, but we are still seeing them,” said Juliet Summers, a former juvenile public defender now at Voices.
State Sen. Merv Riepe, a Republican who chairs Nebraska’s Health and Human Services Committee, said lawmakers and agency officials there are working on solutions. He said Phillips has made admirable improvements and begun to restore trust in the agency.
“It’s hard to change a culture in three or four years, but I think she’s set it on track,” he said.
‘A breath of fresh air’
Phillips, who starts in Austin on Friday, won’t directly oversee child welfare in Texas; the Department of Family and Protective Services, which oversees that work, was spun off from HHSC last year.
The two agencies are still joined at the hip, though, and Phillips will have no shortage of contracting issues to confront with Medicaid, which comprises a majority of the state’s health and human services spending. And that’s all at an agency with an annual budget more than 10 times larger than Nebraska’s.
Phillips helped expand Medicaid managed care in Nebraska in 2016. The effort got off to a rough start, with reports of providers going unpaid and patients being denied legitimate medical services. Janet Seelhoff, executive director of the Nebraska Home Care Association, said officials under Phillips have been responsive to the complaints, and the system has been improving, especially in recent months. It’s still not where it needs to be, however.
“At this point we haven’t had any home-care providers in Nebraska indicate they’ll stop serving Medicaid recipients,” Seelhoff said. “But I think if there continues to be ongoing issues, it could come to that point.”
Both the Nebraska and Texas health agencies declined to make Phillips available for an interview. In August, a spokesman in Nebraska told a reporter there that the agency agreed with some findings in the child welfare review and disputed others, saying it was premature for auditors to call certain costs unreasonable.
Phillips has secured some clear victories. She helped reduce wait times for Nebraskans applying for benefits such as food stamps, expedited licensing for nurses in the face of a statewide nursing shortage, and stepped up preventive efforts to serve families at risk of having their children placed in foster care. Phillips worked to reverse that, supporting researchbased intervention programs and incentives to boost kinship care, where relatives take in children from struggling homes. The removal numbers haven’t dropped dramatically, Summers said, but that’s likely because of an uptick in Nebraska’s rate of drug addiction.
In an interview last month with the Associated Press, Phillips said she was happy with the agency’s efforts to streamline its services, and confident more improvements were on the way.
Kathy Campbell, a former Republican state senator in Nebraska who oversaw the Health and Human Services Committee when Phillips started, called her “a breath of fresh air.” Phillips made a point to meet regularly with Campbell, sharing information and fielding questions.
“I always felt that she was forthright and honest, and told it like it is,” Campbell said. “She didn’t sugar coat things.”
Problems in Texas
That will prove critical in Texas. As head of the health commission, Phillips will oversee nearly 60,000 employees and a $40 billion annual budget. Among many concerns, the agency has been accused of bungling multimillion dollar contracts by inaccurately scoring vendor bids and failing to check references.
Earlier this year, auditors found it had incorrectly allowed an insurance company to pay $29.6 million in bonus and incentive payments to medical providers. The agency had to cancel five managed-care contracts in the Children’s Health Insurance Program because of flaws in the procurement process. It failed to place substantial fines on medical companies despite evidence they were shortchanging sick and vulnerable Texans.
And last year the agency was accused of having taken too long to report dozens of contracts worth at least $100 million to the legislature. Amid all that, several top officials have been fired or reportedly forced out, and staff turnover remains high.
Abbott is confident Phillips can stem the bleeding and bring accountability.
“If one thing is clear from Dr. Phillips record, it is that it doesn’t take her long to begin making meaningful and lasting change,” said Ciara Matthews, a spokeswoman.
Before Nebraska, Phillips rose quickly through the ranks at the Louisiana Department of Health and Hospitals, most recently serving as deputy secretary. She has a bachelor’s degree in kinesiology, a master’s degree in public administration, and a doctorate in public policy, the last of which she completed while working in Nebraska.
Phillips grew up in Port Sulphur, a former company town on the toe of Louisiana’s boot, just a few miles from the Gulf of Mexico. She has said she got into the health field after witnessing her grandmother’s struggles with rheumatoid arthritis.
Her salary in Texas will be $275,000.